Answer these questions base on the brand Nike.
– Why are ratios useful? What are the five major categories of ratios?
– Calculate the last annual report’s financials for current and quick ratios based on the balance sheet and income statement data. What can you say about the company’s liquidity positions? We often think of ratios as being useful (1) to managers to help run the business, (2) to bankers for credit analysis, and (3) to stockholders for stock valuation. Would these different types of analysts have an equal interest in the company’s liquidity ratios? Explain your answer.
Current ratio = Current assets/Current liabilities
Quick ratio = (Current assets – Inventories)/Current liabilities